SOUTH SYDNEY may be the ''Pride of the League'' but the NRL club is worth next to nothing, according to an independent valuation.Russell Crowe has flagged his intention to offload his 37.5 per cent share of the Rabbitohs but it is likely to be a tough sell based on recent financial performances.Fairfax Media commissioned former fund manager Matthew Kidman, a Herald business writer, to scrutinise their books. Based on information available up until October 2011 - the latest financial report hasn't been released - Kidman described the foundation club as a ''horrible investment'' for prospective buyers.The club's latest annual report states it recorded an $864,225 loss, has liabilities of $10,643,118 and assets of just $4,652,784. ''If it was traded on the share market, the equity would be worth zero and possibly negative because of the debt problem,'' Kidman said.However, the greatest put-off for prospective owners is likely to be outstanding loans of $6.15 million - $1.65 million owed to Crowe and the rest owed to co-owner Peter Holmes a Court. The club has been unable to meet the repayments and the loan was renegotiated, with repayments to begin on October 31, 2015, and ''scheduled to be repaid evenly over a 10-year period''.As yet, Holmes a Court has not indicated whether he also wants to part with his 37.5 per cent stake.The pair bought 75 per cent of the club for $3 million in 2005. Souths have posted one operating profit in the past five years. ''From what I can see, the club has just been appallingly run,'' Kidman said. ''They've overspent, sold their assets and they are still not making money. Even if they make a profit next [financial] year, it won't change things significantly unless it's an enormous profit.''Kidman believed the best chance of finding a buyer would be if the seller was prepared to forgive the debt or perhaps sell it off at favourable rates in exchange for equity.''There are only two types of buyers - one who is emotional and happy to take over the debt and who will burn money doing it; or there is a buyer who does a debt deal with them,'' he said.On the field, the Rabbitohs' stocks are soaring. They fell just one win short of the 2012 grand final and boast a roster which includes Greg Inglis, Sam Burgess, Issac Luke and Adam Reynolds. They are well on their way to meeting their target of 25,000 members for this season, with 19,662 already signed up at the time of writing. They also can boast strong crowd and sponsorship figures after improved on-field fortunes in recent years.Making the sell harder for Souths is the fact that Melbourne and, reportedly, Brisbane are other NRL clubs looking for cashed-up buyers. The Broncos are one of the only NRL clubs to regularly make a profit.Max Delmege, who famously saved Manly from the brink of financial collapse, believes it is possible for private owners to make money from rugby league.''With the new grants from the Independent Commission, and with a strong marketing team, there's no reason why you can't,'' Delmege said.''You've got great brands with enormous following. Looking back, if I had my time again I would have listed Manly because the supporters would love to buy shares in something like that. It can definitely work in private form.''South Sydney's latest annual report is expected to be released in the coming weeks.NRL clubs are not the only teams struggling financially in the tough economy. A BBC Inside Out investigation found that Super League clubs faced a combined debt of £68.5 million.

With or without Russell Crowe Souths will continue to do well. We currently have 21,000 members, are expected to have 25,000 by the time the season kicks off and each one of those members, ticketed or not, pays a substantial amount that will ensure Souths are in a healthy state financially.

To an investor Souths are worthless, just like every other club. But quite frankly that is a non-issue. Russell Crowe didn't buy into Souths in order to make money. He did it because he wanted a say in how the club was run because he was giving the club money already, without being able to chip in with his own ideas. Thankfully he did buy in though, because the club was being run poorly during the George Piggins era.

Crowe and Holmes a Court were able to buy into the club relatively cheaply due to the club being seen as a basketcase, in all aspects. They however knew better. Where the club once were running in debt, had no reasonable corporate offices, football club offices or useable assets, and were also owed money by the leagues club (which had originally been set up to fund the football club), Crowe invested in the leagues club, gained the support of the mayor and had the run-down Redfern oval turned into a state of the art club office and training centre.

Souths according to the new annual report have made a profit, and are expected to increase profits every year from here on, based on the fact that we aren't in need of ploughing our funds back in the club repeatedly as we have been doing the last few years. We have everything we need in place and despite owing money to Crowe and Holmes a Court we aren't required to pay them back unless we're at a point where we are swimming in money.

Also, as an update to the above article Peter Holmes a Court has comfirmed we will continue on as part owner of the club.

Rusty can go knowing that in Chairman Nick Pappas the club is in exceptionally good hands and is far from being in trouble.

We do have lots of casual fans. However the fact is, if you look at our crowds, we're doing well and most fans have watched games live, if based in Sydney. Check out the fan map on nrl.com, look at any major town or city in nsw, qld or vic and you will see why pur fambase from outside Sydney is equally important, despite not attending games. Keep in mind it costs a minimum of $100 for an adult to be a member of the club, even if based in Victoria like I am.

With or without Russell Crowe Souths will continue to do well. We currently have 21,000 members, are expected to have 25,000 by the time the season kicks off and each one of those members, ticketed or not, pays a substantial amount that will ensure Souths are in a healthy state financially.

To an investor Souths are worthless, just like every other club. But quite frankly that is a non-issue. Russell Crowe didn't buy into Souths in order to make money. He did it because he wanted a say in how the club was run because he was giving the club money already, without being able to chip in with his own ideas. Thankfully he did buy in though, because the club was being run poorly during the George Piggins era.

Crowe and Holmes a Court were able to buy into the club relatively cheaply due to the club being seen as a basketcase, in all aspects. They however knew better. Where the club once were running in debt, had no reasonable corporate offices, football club offices or useable assets, and were also owed money by the leagues club (which had originally been set up to fund the football club), Crowe invested in the leagues club, gained the support of the mayor and had the run-down Redfern oval turned into a state of the art club office and training centre.

Souths according to the new annual report have made a profit, and are expected to increase profits every year from here on, based on the fact that we aren't in need of ploughing our funds back in the club repeatedly as we have been doing the last few years. We have everything we need in place and despite owing money to Crowe and Holmes a Court we aren't required to pay them back unless we're at a point where we are swimming in money.

Also, as an update to the above article Peter Holmes a Court has comfirmed we will continue on as part owner of the club.

Rusty can go knowing that in Chairman Nick Pappas the club is in exceptionally good hands and is far from being in trouble.

We do have lots of casual fans. However the fact is, if you look at our crowds, we're doing well and most fans have watched games live, if based in Sydney. Check out the fan map on nrl.com, look at any major town or city in nsw, qld or vic and you will see why pur fambase from outside Sydney is equally important, despite not attending games. Keep in mind it costs a minimum of $100 for an adult to be a member of the club, even if based in Victoria like I am.

I know roughyedspud,the game is finished.Quite why you 'support' it,is beyond me.

is that the best you got??

if you don't like the fact that i challange stupid people who come up with stupid ideas...or if you don't like the fact im pointing out that the australian game is in a far worse financial than we are....then jog on

Just as a matter of genuine interest,what point are you trying to make with your relentlessly negative and invariably inaccurate posts?Would you be happy if the NRL collapsed,do you want to see Clubs go bust,do you want every coach to be sacked?I just don't know what would make you happy.

Rugby League in Australia is like Soccer in the UK. Yes clubs have debts ( Though the NRL are nowhere near as bad as Soccer) but they command and get top dollar and with many on recently signed contracts (TV, Main sponsors etc) the game is not exactly short of money. And the NRL clubs have way more money and invest more money than SL clubs. Sadly many are not that well run. But others like Bronbcos are and make massive turnover which SL can only dream about. As usual somebody who hates Australia and all things Australian seems to find joy in what is a non story

Just as a matter of genuine interest,what point are you trying to make with your relentlessly negative and invariably inaccurate posts?Would you be happy if the NRL collapsed,do you want to see Clubs go bust,do you want every coach to be sacked?I just don't know what would make you happy.

just highlighting a concern.....yeah sure they have a billion dollar tv deal....but the difference between the last deal and the new deal has pretty much gone straight to the players due to the increases in salary cap....all the while the clubs still lose millions of dollars each year...

and balls do i want the NRL to go bust...the whole game is depentant on a strong and solvent NRL.....even international RL....if we're ever to match the aussies we need more of our players in the NRL...

Rugby League in Australia is like Soccer in the UK. Yes clubs have debts ( Though the NRL are nowhere near as bad as Soccer) but they command and get top dollar and with many on recently signed contracts (TV, Main sponsors etc) the game is not exactly short of money. And the NRL clubs have way more money and invest more money than SL clubs. Sadly many are not that well run. But others like Bronbcos are and make massive turnover which SL can only dream about. As usual somebody who hates Australia and all things Australian seems to find joy in what is a non story

i heard the other day that the broncos take over $30m in gate recipts.......and the broncos are floated on the aussies stock exchange...so has to be run properly....hence why they are the only that makes a profit every year...

The Broncos and to a smaller extent Souths are the only two clubs in the NRL whose aim currently is to return a profit, however small. In Souths case it's not something the club has looked for each year, instead choosing the route that the majority of other clubs take. Which is to pour all income into resourcing their teams and support infrastructure. Some clubs are smarter about it than others. Cronulla remind me of a few British clubs, in that their spending revolves around future plans, which in some cases are unlikely to eventuate. This is a generally silly move, and one that governing bodies need to be vigilant against where plans aren't fully developed. Other clubs like Newcastle and Melbourne will continue to survive, one way or another. Their reliance on private investment needs to be offset against funds that come from the governing body, as will happen. However, unlike Melbourne, Newcastle are run quite poorly and should have a broom swept through the entire club with help from the NRL.

At the end of the day I would love to see the NRL and RFL place a cap on infrastructure spending, because that is where the bulk of finances is being spent. Not the playing rosters. No matter how much money NRL clubs are given they will continue to spend it all, unless directed otherwise. Whether such a cap is equal or turnover based is up for debate, but either way it needs to be done.